Charlotte Street Partners

DAILY BRIEFING

DAILY BRIEFING

Don't cry for me, Myanmar

Written by Li-Ann Chin, associate 
Edited by Kevin Pringle, partner
3 February 2021

Good morning,

A decade after the junta’s end, Myanmar’s military has seized power in a coup and declared a state of emergency, detaining Aung San Suu Kyi and other senior politicians from the ruling party.
 
An announcement broadcast on military-owned Myawaddy TV revealed that the army had taken control of the country for one year, with power delegated to commander-in-chief, general Min Aung Hlaing. The government’s failure to act on the military’s claims of voter fraud in last November’s election – which Aung San Suu Kyi’s party won in a landslide victory – has been cited as reason for the insurrection.
 
The nation’s de facto leader and Nobel peace prize winner, Aung San Suu Kyi, is no stranger to global controversy in the eyes of the international community, having received widespread criticism in the past over her unwillingness to condemn the atrocities forced upon the Rohingya minority by the military. In Myanmar, however, she remains a beloved figure. The takeover represents a sharp reversal of the slight yet significant progress towards democracy Myanmar has made in the recent years, following five decades of military rule and the country’s international isolation that began in 1962.
 
And yet, history may well turn on its head, cautions David Mathieson, former senior researcher on Myanmar for the Asia Division of Human Rights Watch. “The army’s actions could easily backfire,” he alleges, “I don’t think they can count on the inaction of a lot of people around the country. You’ve got a generation who grew up with her in house arrest, and a younger generation who grew up with her being free, and really supporting her. And there are a lot of people in ethnic states who can’t stand her, or her party – but hate the military.”
 
In response to the coup, a verified Facebook account from the country’s National League for Democracy party published a handwritten note on behalf of Aung San Suu Kyi, urging citizens to protest and wholeheartedly oppose any return to “military dictatorship.” Indeed, resistance to the military in Myanmar’s biggest city, Yangon, is reportedly growing, with residents banging pots and pans, and honking car horns to express their dissatisfaction. Medical staff in several major cities are reportedly planning strikes, while the Yangon Youth Network activist group has launched a civil disobedience campaign.
 
As seen in neighbouring Southeast Asian countries, ThailandPhilippines and Indonesia over the last year – will the beginning of 2021 similarly be marked by a civilian uprising in Myanmar?

News

Tests results by the University of Oxford, published in a pre-print report with The Lancet, showed a 67% reduction in positive Covid-19 results among those vaccinated. The report also revealed that a single standard dose of the Oxford/AstraZeneca vaccine remains 76% effective from day 22 to day 90 after the jab, which supports the UK government’s strategy in rolling out first doses, with a second dose administered after 12 weeks.
 
A Moscow court has sentenced Alexei Navalny to two years and eight months in a prison colony, in a landmark decision for Vladimir Putin’s crackdown on the country’s leading opposition figure. The court’s decision represents the most important verdict against a foe of Putin’s since the 2005 jailing of the oligarch Mikhail Khodorkovsky, making Navalny the most prominent political prisoner in Russia.
 
Following a military coup in Myanmar, the United Nations Security Council met yesterday to discuss a joint statement condemning the takeover but failed to agree on one when China vetoed the idea, warning that international pressure would only make things worse in Yangon. According to Sebastian Strangio, author and Southeast Asia editor of The Diplomat, Beijing’s stance is consistent with its overall scepticism of international intervention.
 
Italy’s president is set to ask Mario Draghi, former president of the European Central Bank, to begin talks to form a new national unity government in Italy, as the country battles the Covid-19 pandemic. Draghi, one of Italy’s most highly regarded public officials and a leader credited with taking decisive action during the eurozone debt crisis, is expected to meet President Sergio Mattarella today. (£)

Business and economy

The UK’s fishermen have been warned they face a permanent ban of selling some types of shellfish to the EU, as they no longer conform to the bloc’s safety standards. According to Politics Home, the post-Brexit ban will supposedly be indefinite and is set to include oysters, mussels, scallops, cockles and clams.
 
According to the Nationwide Building Society, UK house prices fell month-on-month in January by 0.3% for the first time since the introduction of a stamp duty holiday – down from a 0.9% expansion in the previous month, which suggests the mini property market boom might be over as the end of the tax break approaches. (£)
 
The UK is expected to take an important step towards the creation of an independent authority to oversee its post-Brexit subsidy regime today, when it launches a consultation on how the new body will operate and whether it should have enforcement powers. The consultation will consist of 42 questions and seek opinions on whether to have a minimum threshold for subsidy deals before they face scrutiny, as well as the timing of disclosure of deals. (£)

Columns of note

With a death toll over two million and nearly 100 million people infected worldwide, Covid-19 is still wreaking havoc, even as vaccines are rolled out. Yet fatalities are far from evenly distributed. Take Vietnam and Singapore versus Mexico and the UK, for example. Penned by Michele Gelfand in The Guardian, this piece explores how cultural differences have played a significant role in defeating the pandemic.
 
There is still hope that the domestic and international backdrop in Myanmar today is very different from five decades ago. Indeed, a young population that has had a taste of political choice may not easily let it go. Now that Western democracies have better developed tools for applying pressure, the FT’s editorial board argues that there is scope to reintroduce and extend more targeted measured aimed at the commercial interests of the military.

Cartoon source: The Times

Markets

What happened yesterday?

London equity markets closed in positive territory on Tuesday, with travel and leisure shares on the rise amid vaccines hopes. The FTSE 100 ended the session up 0.78% at 6,516.65, and the FTSE 250 was 1.46% firmer at 20,690.21. Across the Atlantic, Wall Street stocks closed firmly in the green, with S&P 1.39% firmer at 3,826.31 and the Nasdaq Composite up by 1.56% at 13,612.78
 
Sterling was in a mixed state against its major trading pairs, however, last sitting 0.14% weaker on the dollar at $1.3644, while advancing 0.22% against the euro to change hands at €1.1354.
 
In company news:
 
Pfizer expects about $15bn in revenue this year from its Covid-19 vaccine developed with BioNTech, and has raised its 2021 profit guidance on hopes that having one of the first vaccines will boost its prospects.
 
Shares in GameStop, AMC Entertainment – the two key ‘memestocks’ at the centre of last week’s market rally – dropped 63% and 50% apiece, while mobile phone maker BlackBerry plunged almost a quarter.
 
Founder of Amazon, Jeff Bezos, is set to step down from his position as chief executive and hand the reins to Andy Jassy, chief executive of Amazon Web Services, the company’s fast-growing cloud computing business. Bezos is expected to remain as executive chair.

What’s happening today?

AGMs
Daily Mail
Premier Miton
Schroder AsiaPacific Fund

GMs
Stobart Group

Trading announcements
Vodafone

UK economic announcements
(9:30) PMI Services

Int. economic announcements
(08:55) PMI Composite (GER)
(08:55) PMI Services (GER)
(09:00) PMI Composite (EU)
(09:00) PMI Services (EU)
(10:00) Producer Price Index (EU)
(12:00) MBA Mortgage Applications (US)
(14:45) PMI Services (US)
(14:45) PMI Composite (US)
(15:00) ISM Services (US)
(15:00) ISM Prices Paid (US)
(15:30) Crude Oil Inventories (US)

Source: Financial Times

did you know

With a total area of 261,970 square miles, Myanmar is the largest country in mainland Southeast Asia, and the 40th-largest in the world. It is somewhat smaller than Texas and slightly larger than Afghanistan.

Parliamentary highlights

House of Commons

Oral questions
Wales
 
Prime Minister’s Question Time
 
Ten Minute Rule Motion
Air Quality – Theresa Villiers
 
Motion
Motion to approve the Draft Value Added Tax (Miscellaneous Amendments to Acts of Parliament) (EU Exit) Regulations 2020 and the Value Added Tax (Miscellaneous Amendments to the Value Added Tax Act 1994 and Revocation) (EU Exit) Regulations 2020 (S.i., 2020, No. 1544) – Jesse Norman
 
The Travellers’ Allowances and Miscellaneous Provisions (EU Exit) Regulations 2020
 
Exiting the European Union (Sanctions) – Nigel Adams
 
Backbench Business
Debate on a petition relating to grooming gangs
 
Adjournment
Establishing a bereavement standard to support families – Grahame Morris

 

House of Lords 

Oral questions
Support for the music sector with touring and other work in Europe – The Earl of Clancarty
Dedicated minister for the hospitality sector – Lord Caine
Annual reporting to Parliament on the state of national preparedness for top-tier risks in the National Risk Register – Lord Harris of Haringey
 
Legislation
Domestic Abuse Bill – committee stage (day 4) – Baroness Williams of Trafford

Scottish Parliament 

Ministerial Statement: Brexit Update
Scottish Green Party Debate: Covid response
Scottish Green Party Debate: Unexplained Wealth Orders

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